challenging the supremacy of economics

note: this is my first post in a while and I’m a bit rusty. I accidentally hit “publish” on a decidedly un-publishable version of this in the midst of editing and writing earlier. Sorry for the confusion.

I was asked a few weeks ago to comment on the fact that a French economist has been awarded the Nobel Prize this year. Frankly, the answer I gave was kind of lame:

… Sean Safford, an associate professor of economic sociology at Institut d’Études Politiques de Paris, the elite institute for political studies known as Sciences Po, said the awarding of the prize to Mr. Tirole, a professor of economics at the University of Toulouse in France, was notable for coming at a time of economic malaise and brain drain, when so many of the country’s brightest are emigrating elsewhere in Europe or to the United States. “The average French person, who is struggling to pay the bills, is not going to rejoice,” he said.

I’ve been mulling over what I meant to say since then. It started to come together when I read Paul Krugman’s lengthy reflection yesterday on a recent working paper by my colleagues Marion Fourcade and Yann Algan who, along with their co-author, Ettienne Ollion have written a little incendiary bomb of a paper titled The Supremacy of Economics. The paper documents the striking dominance that economics has achieved since the 1980s over sociology and political science in the United States. I read The Supremacy of Economics immediately on the heals of another of Marion’s papers, this one with Rakesh Khurana which documents the rise of financial economics within American business schools. Taken together the two papers paint a clear picture establishing that the discipline of economics — and financial economics in particular — has taken a confidently dominant position at in the United States which has given it unprecedented sway in the halls of policy-making and of commerce and proposes a compelling account of how it got there.

Krugman calls the tone of The Supremacy of Economics “jaundiced”. I would call it wistful. You get the sense that it could have gone another way if it weren’t for the social skill of certain individuals and the interlocking of particular ecologies at particular points in time. (If that wasn’t the tone Marion and the others meant to convey, then I’ll claim it for myself.)

If that alternative is possible anywhere, it should be in France where I now live and work, since — as is the case with its food, its wine and its health care system — here in France the nexus of academic, political and business elites is different. Very different.

In contrast to the story that Marion and her various colleagues tell about the US, academic disciplines (including economics) have not — yet — assumed the central role in France that they have in the American scene. As Bourdieu observed with far far greater skill than I could, French grandes ecoles are unapologetic factories of elite self-reproduction. Most teachers are graying wizened poobahs of their field. Politicians and policy-makers teach other politicians and policy-makers. Engineers teach other engineers. And researchers basically teach and train other researchers on how to be researchers, and thats all. Period.

As Marion and Rakesh show, American business schools in the 19th and early 20th centuries were organized along lines not all that different from the French model. There may have been economists at the helm, but the predominant logic was vocational in the sense that the teachers were mainly practitioners who saw their roles as socializing a younger generation to the norms of the field as situated within prevailing moral values of the day. (Moreover, the “economists” were of the old-school institutionalist variety, not today’s preening quant-jocks).

This begs the question: How did the academics break this pattern to lay claim to teaching, consulting and advice-giving well beyond their home “territory” in America? And how, ultimately, did the (financial) economists come to dominate it? The story Marion and Rakesh tell is fascinating and it is well told. It involves strategic action, social skill and a healthy dose of help from the Ford Foundation all couched within a nuanced theory that mingles Fligstein, McAdam, Bourdieu, MacKensie, Callon and Abbot almost in equal measure. Briefly put, there are two major steps that led America down that particular path. The first was the appearance of an alternative model pioneered at Carnegie-Mellon. Seeking to establish itself in a field dominated by Harvard and Wharton, Carnegie-Mellon hewed to a boldly discipline-based approach to business education. This alternative was amplified by the Ford Foundation which was seeking to differentiate itself within its own competitively saturated field. In the aftermath of the Great Depression, it was understood that previous models of training the elite had produced disappointing results. The Foundation latched on to Carnegie-Mellon’s idea and worked to diffuse it throughout the field. The second step brings in the University of Chicago which ran with the idea of discipline-based teaching, but focused it much more sharply on economics and in particular, on financial economics. The GSB then became the leading player in the “performative” turn which has brought financial economics into boardrooms, Wall Street, the halls of government and of course, the annals of social science.

Which brings us back to France.

France today faces what the Times (constantly) refers to as “persistent malaise.” The economy is flat. The European project is stalled. Its political elite are perceived as out of touch. There is a sense that the system around which France has been organized since 1946 is… just kind of disappointing. And this has led to a broad reflection on the process by which this country produces its political elite.

Sciences Po, where I work, sits at the center of that debate. In the years after the Second World War, General De Gaulle gave Sciences Po a special status that made it the primary path to entering the bottom rung of France’s administrative and political elite, the Ecole Nationale d’Administration. Sciences Po’s teachers were largely drawn from the ranks of the political elite itself. But the school has moved in recent years to beef up its academic credentials and in large part that shift has been justified by a familiar narrative: it is the disciplines, with a dispassionate and theoretically grounded approach, that should take the lead in defining the curriculum of elite education. (As an example: Dominique Strauss-Kahn taught Sciences Po’s main introduction to economics course up until his appointment at the IMF. Today its taught by… Yann Algan).

Here’s the thing, while Marion and Rakesh expertly situate their account within a smartly argued and largely persuasive theory of “linked ecologies”, I could not help feeling that there was an element of chance involved in the ultimate rise of financial economics in the US: The University of Chicago happened to become home to a troika of free-market true believers which included Milton Friedman. The result, ultimately, leads us to The Supremacy of Economics. Could there have been an alternative? One that was less dogmatic? One in which the other disciplines were not isolated and ultimately relegated to the junior leagues?

This brings me back to a French economist winning this year’s Nobel.

When I arrived at Sciences Po, I was impressed by the idea that sociology, political science and economics stood on a more equal footing here than had been the case, certainly, when I was on the faculty of the Chicago GSB. I felt the conditions existed here in which a real dialogue across these disciplines could produce a richer, more compelling approach. It was a place where what we call “economic sociology” could find a fresh home.

I still hope that. But that outcome is by no means inevitable. Winning the Nobel Prize in economics this year and the phenomenal success of Thomas Pickety’s book raise the profile of economics in this country precisely at a moment when political, business and academic elites are questioning the system and looking for the kinds of concrete answers that disciplinary economics provides. In other words, the conditions exist for the intermingling of intellectual streams which seems possible here to breakdown and head down a path toward a European version of The Supremacy of Economics.

Yet the very existence of the paper that motivated this post is a prime example of the kind of dialogue which seemed (and still seems) possible here suggestiing that that outcome could turn out differently. After all, Marion is a prominent young sociologist of world-class capabilities, Yann Algan is very much her equal in economics and the paper was written during Marion’s two-year sabbatical at Sciences Po. But the lesson that I take from Marion and Rakesh’s work is that economic sociology — or whatever you want to call this more egalitarian approach to social science — needs to “perform” itself. And it does that by building a curriculum capable of producing the next generation of elites.

My bottom line is: If economic sociology is to amount to anything, this kind of cross-disciplinary dialogue must continue and it must mature into something that does more than simply critique the hegemony of economics. What it must turn into is a curriculum.

The opportunity is there. But is economic sociology ready for prime time? (Oh, and does anyone have a good contact at the Ford Foundation?)

13 Responses

Bourdieu is quite critical of the French system, but isn’t one of the key differences with other large political-educational (not to mention military) systems that the French administration is separate and subordinate to the professional professoriate?

I read Marion et al.’s paper this weekend too and thought it was fascinating. Interestingly, this weekend the New York Review of Books put out an essay by Alan Blinder called, What’s the Matter with Economics?, a review of Jeff Madrick’s Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World. Anyway, in his review he is much less optimistic about economics’ influence than Marion and her coauthors are. One reason for this is because as an insider to economics he sees more heterogeneity in theory/empirical evidence than we as outsiders see. Certain people in the discipline are inordinately influential, whereas the mainstream views of field are often ignored, especially about what he sees as their most important claims. Here’s a snippet:

In a book published in 1987, I coined (and provided examples of) what I called Murphy’s Law of Economic Policy:

Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently.

It was true then, and it is true now. Just last year, two economists comparing the disparate answers to survey questions from forty-one prominent academic economists versus a representative sample of Americans reached the same conclusion as I did.3 Which group do you think holds more sway with elected politicians: average Americans or economic experts? (Hint: Which has more votes?)

Not convinced? Then think about how often Congress has enacted or raised a carbon tax. Or reduced the tax advantage for homeownership. Or how many cities charge congestion fees (high tolls in peak hours) on their bridges and tunnels. In each of these cases and many more, a huge majority of economists—Democrats, Republicans, and independents alike—not only favors the indicated policy but thinks it axiomatic. Arthur Okun, who chaired the Council of Economic Advisers under President Lyndon Johnson, wrote forty-four years ago that “on a number of issues, a bipartisan majority of the profession would unite on the opposite side from a bipartisan majority of the Congress.” That hasn’t changed.

Now, I’m in an American business school, and so I recognize the myriad ways that economics-thinking appears in our training of future business elites – so much so that when we offer them a different social science perspective we feel absolutely heterodox – but I think it’s also fair to say that we sociologists overestimate economists’ influence in policymaking. When politicians favor a certain policy they will likely look for (and find) economists who are willing to support that policy, but this doesn’t mean that the policy was derived deductively from economics.

But taking this a little further, Blinder argues that a minority of economists, who are outside the mainstream of the discipline, have captured certain realms of policy. The sin of mainstream economists is to not do more to rein in these outliers of their field.

While we have rarely convinced the majority of anything, we have managed to convince a determined minority of many things—or perhaps of caricatures of those things. Gordon Gekko’s infamous assertion that “greed is good” is not far from the invisible hand doctrine, which is Madrick’s first “bad idea.” Some of our students grow up to be rich or otherwise powerful and have the ear of politicians far more than their teachers ever did. Some of them wound up doing great damage on Wall Street. They should be ashamed of their actions; but we, their teachers, bear a little of the guilt, too.

To be more concrete, many economists teach—and a number extol—the efficient markets hypothesis, which Madrick offers as another bad idea. That theory undergirded many of the derivatives that did so much harm once the housing bubble burst. If the sins of the sons can be visited on the fathers (yes, they were mostly men), economists bear part of the blame.

The majority of economists don’t think that all of these bad ideas are correct (although perhaps the majority of Chicago Booth economists think so, I don’t know). Blinder believes that if policymakers would listen more often to what the mainstream of the discipline actually believes, then we’d have a very different set of economic policies.

Anyway, none of this counters your main point about the need for sociology to offer coherent alternative narrative, but it’s interesting to know that the majority of economists feel that they lack influence too.

Fascinating post, Sean. Given the different approaches between our disciplines, I’m skeptical that in our current economic and political system that sociologists can ever have the same stature. Sociologists challenge our system. Economists support it. But can we be doing more? There is another debate happening around this issue of whether sociologists could be doing more policy-wise and “compete” with economists methodologically (and financially). One that takes up the quant/qual (tiresome) debate is here: http://noahpinionblog.blogspot.fr/2014/12/sociology-vsthe-empire.html.

One quibble though I have with your post is your comment about the average French person not being impressed with Tirole’s Nobel win. I have recently moved to France and have a position at the Institute for Advanced Study in Toulouse, based at the Toulouse School of Economics. For outsiders, Tirole is here and helped found both institutions. I was struck by how many “average” people were talking with pride after he won – from bus drivers to parents at my kids’ (public/mixed class) school. For exactly the reason you stated, I was surprised at this response – and at the billboards all over town of his image. Would this pride have happened in Paris? It certainly never happened in Berkeley. Some of it is a small-city effect, but it’s not a reverence to economists, per se – it seems it’s more of a “home team” win. But as you know, there also seems to be more reverence for, and involvement in, intellectualism here in France among the public. But of course, a sociologist would never be on a billboard, or win a Nobel for that matter (#NotBettingOnGranovetter).

I think you forget that the University of Chicago in its hey-day was interdisciplinary. Aaron Director was the idealogical centre of the group which included Friedman, Becker and Stigler and he was a legal scholar. Other legal scholars such as Ronald Coase and Robert Bork were some of the most influential on policy and academia.

Traveling today, so I can only really muster quick responses. Brayden first: points well taken. One quick thing to note is that Yann is a major rising star, Clark Metal nominee-type economist. He more than qualifies as an insider which I suspect is what have that paper the street cred to get noticed by the likes of Krugman (just a guess on that). And indeed while I have certainly more more than a few of the arrogant-head-in-a-data-series-type economist in France, Yann (and for that matter Triole or Picketty) are not stereotypical.

But to the substance, I probably do overstate the degree to which they discuss influence on policy. Rakesh and Marion certainly are mainly discussing financial economics affect on corporate forms and strategies.

That said, while I have huge respect for Kellogg a host of other major schools, there is something to the idea that the real widespread influence of academic economics can be attributed to just the top three institutions: Harvard, MIT and Chicago. Others and individuals do make an pact. But institutionally, I’d say it’s those three that produce the lions share.

As to Chicago: my own time at the GSB certainly suggested the school’s commitment to intellectual diversity. But there’s no question about the intellectual pecking order either. It’s really a matter of numbers. We were approximately six sociologists (in my day). There were a few psychologists (strongly connected to the behavioral economics group) . That was it for disciplinary intellectual diversity though. We even had a hard time finding political scientists.

The larger point there is that, while Chicago sociology, Chicago anthropology, Chicago Political Science, etc, have all made towering intellectual contributions, I don’t think there’s much question that is has been Economics (both the in department and in the B school… and their siblings in the law and policy schools) that have had the kinds of “performative” influence that Marion and Rakesh discuss.

And on France. First, I agree of course that that line about “regular” French people not caring was silly. Like I said, it’s not exactly the quote I will put on my grave. But as for the idea that sociology is forever a critic; there I don’t agree. Perhaps it will come out more in another post–or something more substantial–but having now led a masters program here at Sciences Po for three years with full responsibility for the curriculum, I have strong views on how to pull together a wider array of social science perspectives into a curriculum. Stay tuned…

Great post — two reactions. One is to Brayden’s comment. To understand the (policy) influence of economics, I think it’s key to find tools for picking apart how it can be influential *at the same time* that economists’ advice is often ignored. Dan Hirschman and I just had a piece come out in SER (http://ser.oxfordjournals.org/content/12/4/779.abstract) that tries to tackle exactly this. We argue that you really need to look at specific organizational locations where economics as a discipline is able to gain a foothold — so in certain government offices, by increasing presence in professional schools, and so on — and then look not so much for advisory influence (i.e. economists say we need a carbon tax so we get one — obviously not the case) but for the circulation of an economic style of reasoning and and the establishment of sociotechnical devices (like CBO scores, or particular cost-benefit techniques) that structure further conversation and consideration of possibilities. The result over time is that, as Brayden points out, other styles of thought become positively heterodox, and policy conversation looks quite different, even though no one is taking economists’ advice. This is basically what my current book is about.

The other is to the Sciences Po issue specifically. I think it’s hard to think about this issue without thinking about the globalization of higher education. There are huge global pressures right now on universities to comply to a single US-style model governed by disciplines and rankings. (Someone like Christine Musselin knows this very well.) That same pressure is going to encourage the reproduction of the disciplinary hierarchy that exists in the U.S. While there may be more room for play because of historical differences in the French intellectual context, I think it will be an uphill battle. Perhaps the differences in French economics specifically (which Marion addresses so well) will make a different outcome possible.

Thanks for the added perspective on that; I agree that its really the language and the style of thought that matters more than a particular policy proscription.

I should perhaps be even more explicit about a couple of things here. (1) I am arguing for, not against, the idea of social science as a performative” influence. (2) I love all my economist friends, even the arrogant quant-jocks. But I see it as part of a social science rainbow coalition of policy and peformativity.

I will take a look at your book. Very briefly, though, what we have been teaching students here at Sciences Po is that policy is a process involving politics (with a small p–think, Fligstein and McAdam politics) and institutional logics as well as the need to maneuver and accomplish goals (think, strategic networks) and institutional analyses (of a political, sociological and rational choice variety). It means being able to read a regression and to think in terms of variables and constants. It means thinking in terms of controls and evaluation criteria. But it also means understanding the idea of complexity as both an abstract principle and a possible subject of modeling. One needs to be a sophisticated consumer of social science and a practitioner who has a — dare I say — tool kit of social sciences tools at one’s disposal.

Operationally, this has meant that we have our students out in the field a lot. But we are working constantly to get them to integrate this wide variety of tools to produce better informed interventions and actions.

As for France and Sciences Po in particular. I had considered a paragraph on the isomorphic pressure felt here. Clearly, I’m part of the “problem” if you see it like that. And in that sense, perhaps this is NOT the place for a revolution to start (I essentially think anywhere I’m sitting is suitable for a revolution).

But again, while I think Marion and Rakesh would (will) howl in protest, there are elements of strategy in their piece. Peripheral, but respected players, new and late entrants, etc etc… I can see a strategic path by which Sciences Po–or some other non-American university–would build an alternative approach. Or maybe it is that Sciences Po would have play more or less the Chicago role: the innovation is pioneered elsewhere but then matured and exported from a place like this. Who knows. I have to say though, sometimes I find it more fun to think about applying some of this stuff that I do writing about it.

Sorry, I should have specified book-in-progress; it’s not done yet. I agree that if change in the relationship among the social sciences happens (including interaction that leads to internal change/evolution within economics — e.g. Piketty), it’s more likely to come from a place like Sciences Po than within the U.S. And I’m not anti-economics, either. I’m just anti-only-economics. But it’s nice to know there are people out there fighting the good fight who are actually in positions to potentially change things.

Thanks Sean for a great post and for starting a thought-thread. A few thoughts of my own:

(1) I found Paul Krugman’s post about economics and its focus on reputation rather than networks right on. I spent three years as a Ph.D. student in economics at MIT and this is consistent with what I observed then and still observe now. I overlapped one year in the doctoral program with Krugman and even as a student he was considered a star economists. At the same time even Paul Samuelson, a Nobel Prize winner and still at MIT was no longer viewed as having the best reputation.

(2) The prominence of economics within the academy is not the same thing as the prominence of economics in public policy. For the former, two things come to mind. One is the importance of mathematics in the status ranking of academic science. Economics is, or at least was, as much about demonstrating your dexterity in applied math than about social science insights. Second, and perhaps more important, is economics’s strong adherence to a neo-classical paradigm (at least within micro-economics). Here I am reminded of Jeff Pfeiffer’s (1994) OMT address on the importance of strong paradigms to have power within the academy. While Pfeffer lost the debate with Van Maanen (1995) over the value for the OMT of having greater paradigm closure with respect to the development knowledge, Pfeffer was arguing about the effect on a field’s power (and indirectly status), rather than its scientific merit. Economists’ paradigmatic closure was for me the reason I left the field.

(3) The policy prominence of economics is conditioned, in my view, not only by its academic standing, but by changes in societal logics. The two are not independent, and the Ferraro, Pfeffer, and Sutton (2005) piece makes a strong case for that linkage. But while the rise of the market logic, particularly post-1980s is shaped by the teaching and language of economics, it is much less about about giving primacy to economists themselves. The strongest influence of economics on the market logic has been in the area of financial economics and the shareholder value logic. Another big influence has been the Milton Friedman strand of capitalism and freedom, but this is much less about economics per se than about the political philosophy of the Chicago School of economics. A major part of economics is the study of externalities and market failure but that is absent from the market logic. One of the reason that economists like Blinder complain that economists don’t have more influence on public policy is that the professional logic of economics has less cultural authority than the market logic.

I know preciously little about France but my sense is that professional logics are much stronger in France than in the United States. Professional logics have been in decline in the United States and professional institutions, for example, business schools, are increasingly dominated by market rather than professional logics. Here at Northwestern, journalism is another example, and the Medill School was put in receivership a few years ago, against the faculty’s wishes, to emphasize a market logic over a professional one. While law schools and medical schools may be more based on a professional than a market logic, the practice of law and medicine in the U.S. are increasingly dominated by market and corporate logics.

Thanks for the thoughtful question. I’m at a conference and wanted to take the time to give a thoughtful response.

And I’ll give a response that in fact comes back to the conference I’m at which is among deans and directors of public policy schools. One thing I’ve noticed in the last few years of this conference is that the students are generally interested in specific policy issues like climate change or work and employment issues. But each year, the big discussion focuses on monetary policy. Euro crisis. Interest rates. Etc etc. I was at a conference a few weeks ago too that had the same tenor. What struck me was that while we flatter ourselves to think that policies and institutions and even corporate strategy matters, the only debate that “the serious people” really pay attention to are the fiscal policy debates. Easy money or tight? That goes for Krugman as much as anyone.

Your thoughts on the professional vs market logic of economics is important. I suppose thpgh, the big question raised by “perform activity” is whether the market logic arose independently or whether it was in fact driven by the success of the professional logic that economists enjoyed in the 80s.

And finally it’s precisely because professional logics do still hold here in France that I think it is worth pausing and considering whether we are at a similar moment in which economics professionals start to climb away from the other disciplines within policy dialogue here. ___________________ Sean Safford Associate Professor of Economic Sociology Director, Master of Public Affairs Institut d’Études Politiques | Sciences Po sean.safford@sciencespo.fr +33(0)635284565

With respect to be primacy of macro issues in public policy there are agenda effects in addition to institutional ones. The global wage stagnation has now been going on for six years so it is a major factor behind macro issues dominating public policy.

Thinking of France makes me think that comparative historical analysis would help understand the dominance of economics in the United States. Within the U.S. The rise of law and economics is also a factor as the law historically drw from a separate logic than economics.

With respect to the rise of the market logic and the rise of financial economics my tentative view is that they co-evolved, with contextual factors such as the hostile takeover movement (which was not originally derivative of economics) playing an important role.